Well, it had to happen. Your credit report provides a number to tell lenders how good a risk you are. Staring in spring, it’s going to tell lenders a lot more than one number. It’s going to tell him all of your numbers.
Last week, a company called CoreLogic introduced a new type of credit file, which is based on the giant repository of consumer data it maintains on just about everything that most of the traditional credit bureaus do not: missed rental payments that have gone into collection, any evictions or child support judgments, as well as any applications for payday loans, along with your repayment history.
The new report also includes any property tax liens and whether you’ve fallen behind on your homeowner’s association dues. It may reflect that you now owe more than your house is worth or if you own any other real estate properties outright. It also is supposed to catch mortgages made by smaller lenders that the big credit bureaus may have missed.
The idea, CoreLogic says, is to provide lenders with more details about prospective borrowers, supplementing what they already know through the more traditional credit reports furnished by the big three credit bureaus, Equifax, Experian and TransUnion. Moreover, CoreLogic has formed a partnership with FICO — the provider of one of the most popular credit scores used by lenders — which will formulate a new consumer score based on the new data.
This is just the beginning.
While the CoreScore credit report became available to all types of lenders last Wednesday, the actual score, which will be ready in March, is being created specifically for mortgage and home equity lenders, though it could eventually be developed for other types of credit.
Are you going to be in this digital web? Probably. “An estimated 100 million American consumers will have a CoreScore credit report, while more than 200 million people have traditional reports from the big three bureaus.”
Ms. Gaskin said that FICO was still tweaking the credit score’s formula. But the next step is to build something that will try to get even deeper inside your financial mind: The company plans to create a more sophisticated tool that will predict how you might behave under different loan terms.
It will get more invasive. “Next year, it will begin to evaluate whether to include even more data, including your payment history on utility and cellphone bills.”
Since CoreLogic is now subject to the Fair Credit Reporting Act, which governs consumer reporting agencies, you will be able to dispute any information that you believe is incorrect. But if the data is accurate, albeit unflattering, it will trail you for a long time. Information culled from public records stays on your report for about seven years (or 10 years for bankruptcies).
This violation of privacy is the tip of the iceberg. Consider what the IRS can do to you if some agent wants to make trouble for you. If a private data-gathering agency can sell this much information to credit-check outfits for a little money, think of what the government can buy for a lot more money — your money, Mr. Taxpayer.
You had better find out what is in your files. Start this year. Then check in six months. To find out how, read the entire article.